Athena. Daily Journal Entries. Algorithmic Accounting Simulations. Abbey Accounting Services, Incorporated. Problem Two. 1 st Web-Based Edition.

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1 Athena Algorithmic Accounting Simulations 1 st Web-Based Edition Problem Two Daily Journal Entries for Abbey Accounting Services, Incorporated Page 1

2 CHART OF ACCOUNTS ABBEY BOOKKEEPING SERVICES, INCORPORATED ASSETS 101 Cash 105 Accounts Receivable 121 Prepaid Rent 122 Prepaid Insurance 127 Office Supplies 131 Office Equipment 139 Automobiles LIABILITIES 201 Accounts Payable STOCKHOLDERS EQUITY 301 Common Stock 305 Retained Earnings REVENUE 401 Bookkeeping Fees Earned OPERATING EXPENSES 602 Office Supplies Expense 604 Vehicle Operating Expense 605 Advertising Expense 606 Delivery Expense 621 Rent Expense 622 Insurance Expense 625 Electric and Gas Expense 626 Telephone Expense 628 License Expense 635 Miscellaneous Expense Page 2

3 RUN THE PROGRAM! Problem 2 Daily Journal Entries Abbey Bookkeeping Services, Incorporated After you have completed the Demonstration Problem, you are prepared to being work on Problem 2, the first full accounting problem. Problem Two will guide you through the journalizing, posting, and statement preparation for a full month of business activity. When you have completed your entries, you may print a trial balance, general journal and several general ledger cards for review. After checking your documents for accuracy with the Problem Check Figures, you will be asked to answer a series of analysis questions using your business documents. Be sure to use the special options introduced in the Demonstration Exercise as you work Problem 2. You can use the D for Date option, Pull Down menu for account entry, C key for copying credit amounts, and the V key to verify your completed transaction (the CV key combination). These data entry features will assist in increasing your efficiency and speed of data entry and data correction. The mouse will only be needed post the completed journal entry. You may prepare your account entry information before sitting down at the computer. You will find that this will speed up your data entry time. You may prefer to analyze each entry and record the transaction on the computer at the same time. 1. Go to 2. To access the Work4Me program, click on Work4Me on the home page. 3. At the log in page, enter your User ID/Name and Password. Then click on Log In. 4. From the Menu Bar of the Data Entry page, move the pointer to Problems, then down to Problem 2, Daily Journal Entries, and click. 5. Click on OK, at the message directing you to click on Daily JE. Click OK again if there are no current journal entries The Clear Screen button: When accessing the Data Entry Page, if there are journal entries already recorded in an earlier session, the last entry recorded will appear in the data entry form. Click on the Clear Screen button to erase this entry from the screen. This feature allows you to view the last entry you made prior to logging off the program or moving from other selection options on the Data Entry page. Page 3

4 TRANSACTIONS FOR APRIL 1-30 April 1 Abbey Bookkeeping Service, Inc. began its business by selling 10,000 shares of common stock at a price of $4.00 per share. Student Analysis 1. At the date prompt, for April 1, enter 01 for the day. When entering any part of the transaction, you may back up and reenter the information by using the backspace key. If you have already pressed the Tab key after entering the date, and wish to change it, move the pointer to the date prompt and enter the correct date. 2. To debit cash, at the account prompt enter 101 (the Cash account number) and press the Tab key. Type 40,000 (without the $ sign) and press the Tab key. 3. At the account prompt enter 301 (the Common Stock account number) and press the Tab key twice. In the credit amount column, enter 40,000 (without the $ sign) and press the Tab key. 4. If you enter the wrong account, click on the account entry line and a dropdown menu of the Chart of Accounts will appear. 5. When you have completed your entry, Click on the Verify Journal button. If the entry is in balance, a message box will appear informing you if the journal entry is in balance (total debit amount equals the total credit amount) and all of the account numbers are from the Abbey Chart of Accounts. If the date, entry, or account numbers are not properly entered, you will be given an error message with the appropriate error details. When all of the error items have been corrected, the Post button will be activated. 6. Post the journal entry to the General Ledger. If after verifying the entry, but before posting, you realize that an account number or entry amount is not correct, click on Clear Screen from the Menu Bar and reenter, verify, and then post the corrected entry. If you discover that a transaction entered and posted into the system is incorrect, two entries are required. Reverse or back out the original error transaction and then enter the transaction correctly. 7. Continue recording and posting the transactions that follow. Page 4

5 TRANSACTIONS FOR APRIL 1-30 April 1 A check for $900 was issued to Jacobson Property Management as payment for the April rent of the business office. Student Analysis 1. Enter 01 for the date (Enter D for Date). 2. Enter 621 for Rent Expense. While working on the journal entries, the full Chart of Accounts is available by clicking on the account entry line. You may also enter the debit to Rent Expense by clicking on account 621 from this pull-down chart. 3. Enter amount of the rent payment (no $ or commas required). 4. Enter 101 for Cash, tab the Credit column and press the CV key combination. 5. Correct any erros, and when ready, click on the Post button to complete the journalizing and posting process. Remember, if the date, entry, or account numbers are not properly entered, you will see an error message with the appropriate error details. When the error item/s has been corrected, the Post button will be activated. If after verifying the entry, but before posting, you realize that an account number or entry amount is not correct, click on the Clear All button from the Menu Bar and reenter, verify, and then post the corrected entry. ************************ Viewing Your Work Move the pointer to Journal/Ledgers/Statements on the Menu Bar, then move the pointer down to General Journal and click. You may view the General Journal and the entries you recorded or print the General Journal at any time. To return to recording transactions, move the pointer back to Data Entry and click. Page 5

6 TRANSACTIONS FOR APRIL 1-8 April 1 Business insurance coverage for the month of April was purchased for $ cash. (Remember to enter D to repeat the date.) Student Analysis 1. Enter 01 for the date or enter the letter D to repeat the date of a previous entry. 2. Enter the correct debit account and the amount. Remember, you can use the pulldown (small arrow) and select the account. 3. Enter the correct credit account and press the CV keys (to copy and verify). 4. Post to the General Ledger. Continue entering the April transactions. If you discover that a transaction entered into the system at an earlier time needs correction, simply reverse or back out the error transaction and then enter and post the transaction correctly. April 3 Issued a check for $ and purchased a business license. April 3 Office equipment was purchased for $3, cash. Enter O3 for the date or enter D to repeat the date of a previous entry. April 3 Purchased office equipment costing $2, and office supplies listed at $ on account (20-day credit) from Roper Office Equipment and Supply. (Remember to select the C key to copy the credit entry amount.) This is a compound entry with two debits and a single credit. Page 6

7 TRANSACTIONS FOR APRIL 1-30 April 5 A check for $1, was received for bookkeeping services completed for a client. Student Analysis April 7 A $ check was issued for April advertising. April 8 Performed additional bookkeeping services and billed the client for $ The client is extended 15-day credit terms. April 10 A used car to be used for business operations was purchased for $7, cash. April 12 A new computer costing $3, was purchased on credit from Computer Express of Granite Bay. April 13 Office supplies for $99.90 were purchased on account from Zikmeister Office Supply. The company offers 10-day credit terms. Page 7

8 TRANSACTIONS FOR APRIL 1-30 April 14 A check for $3, was received, today, for bookkeeping services completed for a client. Student Analysis April 15 Performed bookkeeping services and billed the client for $ The client is extended 15-days credit terms. April 17 Paid $66.50 to Bart s Chevron Services for gas and a tire repair. April 20 Postage stamps (office supplies) for the office were purchased for $28.00 cash. April 22 Gold Run Courier Services was paid $15.00 cash to deliver completed documents to a client. April 23 A check for $ was received from a client as payment in full on their account balance that is due today. Page 8

9 TRANSACTIONS FOR APRIL 1-30 April 23 A check for $99.90 was issued as payment in full on the Zikmeister Office Supply account that is now due. Student Analysis April 23 A check for $65 was issued to the Dozier Printing Services for color copies of an advertising brochure. April 23 A check for $2, was issued as payment in full of the accounts payable balance owed to Roper Office Equipment and Supply Company. April 25 Completed $650 worth of bookkeeping services for a client and the client paid in full with a check. April 27 An insurance policy to insure the company assets for the months of May, June and July was purchased for $1, cash. April 29 A check for $ was issued in payment of the Newcastle Phone Company telephone bill. April 30 A check for $ was received from a charge customer as a payment on the customer s account. Page 9

10 TRANSACTIONS FOR APRIL 1-30 April 30 A check for $3, was issued as a prepayment of the rent for May, June and July. Student Analysis ************************ This Completes the Transactions for Problem Two Daily Journal Entries. Page 10

11 Now that you have completed entering all of the April transactions for Abbey Bookkeeping Services, Incorporated, it is time to check the accuracy of your work. 1. Move the pointer to Journal/Ledgers/Statements in the Menu Bar, move down to the General Ledger selection and click. The completed Trial Balance will appear on the screen. Print the trial balance. 2. Move the pointer to Check Figures in the Menu Bar. Select Problem Check Figures and Print the Check Figures for Problem Two - Daily Journal Entries If Your Balances do not match the Correct Balances of the selected account totals in the Check Figures for Problem 2, you must correct the unmatched balances before answering the evaluation questions. Any account that does not match provides a clue to the transaction(s) that should be reviewed. The most efficient method of locating and correcting the error(s) is to compare the journal entries to the transactions in the module. Proceed to the instructions in Error Correction Procedures at the end of this problem. If Your Balances match the Correct Balances for the selected account totals in the Check Figures for Problem 2, then complete the instructions below, and answer the questions on the examination on the last page of this manual. 3. Click on the Ledger Card button. The Cash ledger card will appear on the screen. Print the Cash ledger card. 4. Click the Ledger Card button and using the pull down screen, select account 105 Accounts Receivable. Click on Show Ledger Card and print the Accounts Receivable ledger card. 5. Using the same selection and print routine, print the ledger cards for 201, Accounts Payable and 401, Bookkeeping Fees Earned. 6. Move the pointer to Journal/Ledgers/Statements in the Menu Bar, then down to General Journal and click. The General Journal will appear on the screen. Print the journal. 7. When all of the required documents have been printed, you have completed your computer work for Problem Two. To exit this problem, click on Log Out. From the PKL software Home Page you may select another problem or exit the website by clicking on the Close button. 8. Using your printed documents, answer the questions to the examination on the next page. After you have filled in the answers, log in to Problem 2. Daily Journal Entries, move the pointer to Evaluations and complete Exam 2: Daily Journal Entries. You may print the examination to hand in to your professor or, if required, your examination to your professor. Page 11

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13 ATHENA - PROBLEM TWO DAILY JOURNAL ENTRIES NAME CLASS DAY AND TIME DATE 1. Do the totals on your Trial Balance match the figures shown in the Check Figures for Problem Two Daily Journal Entries? A) Yes B) No 2. What is the correct balance of the Cash account at the close of business on April 3? 3. At the close of business on April 13, what total amount has been debited to the Cash account so far this month? 4. Has the correct balance of the Cash account fallen below $20,000 at any time during April? A) Yes B) No 5. What is the total amount owed to Abbey Bookkeeping Services by clients? A) $ B) $ C) $ D) $1, What is the reason for your answer to question number five? A. customers are not allowed to charge B. all accounts receivable balances have been paid in full C. there have been no charges by customers this month 7. How much was owed by Abbey Bookkeeping Services, Incorporated, on April 15? List dollars and cents in your answer. 8. How many individual vendor accounts are still outstanding at the end of April and must be paid in May? A. Four B. Three C. Two D. One 9. What are the total revenues earned through the close of business April 15? $ $ $ $ 10. What are the total revenues for the month of April? $ Page 13

14 11. What is the total of the April expenses? $ 12. What is the total net income for the month of April? $ 13. The net income is what percent of the total revenues? Round your answer to the nearest hundredth (two decimal places). Example = 52.35%. On the computer examination DO NOT write percent or use the percent sign in your answer. 14. If a balance sheet was prepared at the end of April, what would be the total for business assets? 15. The beginning Retained Earnings balance for this new business was $0.00. If a Retained Earnings Statement is prepared at the end of April, what will be the new balance of this account? % $ $ Page 14

15 JOURNAL ENTRY CORRECTION ERROR CORRECTION PROCEDURES For the Athena Accounting System It is recommended that you do not make a correction to an incorrectly entered date. Make a note of the error for future reference. If you have omitted a journal entry, record the entry using the date of the transaction. Make note of the error for future reference. Carefully examine all entries recorded for each period and when an error is found use the following correction procedure: 1. Back the transaction out using the date used in the incorrect entry. 2. Enter the correct transaction using the correct date of the original entry. If, for example, you find that a bookkeeping fees transaction for cash on April 8 was entered as a debit to Accounts Receivable and a credit to Bookkeeping Fees Earned, simply back out (reverse) the error as follows: April 8 Bookkeeping Fees Earned 2,400 Accounts Receivable 2,400 When the entry has been verified, the accounts will now show the original balances in place before the error entry. Using the same April 8 date, record the correct entry. April 8 Cash 2,400 Bookkeeping Fees Earned 2,400 The incorrect entry, the back-out entry, and the correction entry will appear in the accounting records leaving a clear, easy-to-follow STARTING OVER If you find that you have several errors, you may wish to reset to the beginning of the problem and record the transactions again. To reset back to the beginning of the problem, move the pointer to Support, down to Files: Reset and Backup, select Reset Problem, and click. Select the problem you wish to reset, and then click on Reset Selected Problems. Your data files will be reset to the beginning of the problem. Page 15

Digital Splash. Keystone One. Problem 8. Manizette Bookkeeping. Algorithmic Problems and Simulations. 1 st Web- Based Edition

Digital Splash. Keystone One. Problem 8. Manizette Bookkeeping. Algorithmic Problems and Simulations. 1 st Web- Based Edition Algorithmic Problems and Simulations 1 st Web- Based Edition Keystone One Manizette Bookkeeping CCTE Model Curriculum Standard: A1.2 Examine, analyze, and categorize financial transactions; A2.3 - Understand